Standard Life Fund Review

78% of Standard Life Funds Have Performed Worse Than at Least Half of Competing Funds

720 Standard Life pension, life and unit trusts analysed.

Only 2.8% maintained top 25% sector ranking consistently over 5 years.

564/720 Standard Life Funds Underperformed.

Standard Life is one of UK’s most recognised fund managers and currently manage over £269 billion on behalf of clients worldwide through numerous different types of investment across a wide range of asset classes.

In order to establish the quality of their funds we carried out a comprehensive analysis of all Standard Life pension funds, life funds and unit trust funds. In total, 720 funds under the management of the Standard Life brand were analysed for performance and ranking alongside all other competing sector funds.

This article and attached report identifies that only 2.8% of these funds have consistently performed within the top 25% in their sectors over the recent 1, 3 & 5 year period up to January 2017.

Standard Life Fund Performance Summary

To carry out this Standard Life performance review we analysed their unit trust funds with some £45 billion of assets in them, together with their life funds containing £6 billion and the Standard Life pension funds with approximately £80 billion held within them. However, quite a large proportion of their funds did not provide the current fund size, therefore the monetary amounts detailed in the below summary tables does not reflect the total assets held within the 720 funds analysed.

In total, we analysed 720 of their funds. Each fund was provided with a ranking based on how they performed alongside every other competing same sector fund during the 1, 3 and 5 year period up to January 2017.

Made up of 103 unit trust funds, 195 Life funds and 422 pension funds, our analysis identifies that 82% of their funds that have at least 5 years history have performed worse than at least 50% of funds in their sectors during the most recent 5-year period. However, 4% of 720 funds with at least 5-years history have delivered excellent returns for their investors. Despite representing only a small proportion of their funds, they offer highly competitive investment opportunities for consumer investors.

Below is the performance summary of the 720 Standard Life investment funds analysed.

The Best Standard Life Funds

There are currently 20 Standard Life funds that have returned top quartile sector performance consistently over the course of the most recent 5-year period. These 20 funds were made up of 7 Standard Life unit trust funds, 2 of their life funds and 11 Standard Life pension funds. These 20 funds have a proven track record of top performance and provide investors with high quality investment alternatives.

Among the best performing Standard Life funds are the ‘Standard Life L&G Over 15 Year Index Linked Gilts Index’ Pension fund and the ‘Standard Life Investments UK Equity Recovery’ unit trust fund. Both of these funds have delivered highly competitive returns for their investors consistently over the recent 5-years. The ‘Standard Life L&G Over 15 Year Index Linked Gilts Index’ Pension fund has excelled in its sector. This fund has been the best performing fund in its sector over the recent 3 year period and over 5 years it has consistently outperformed at least 95% of funds in its sector.

The ‘Standard Life Investments UK Equity Recovery’ unit trust fund has also excelled. This fund sits within the UK All Companies sector and over the most recent 5 year period it delivered excellent growth of 158.83%, ranking 4th out of 254 funds.

Poor Performance

In contrast to their consistently top performing funds, a large proportion of Standard Life’s funds have consistently underperformed. One such example is the ‘Standard Life Investments UK Equity Growth’ unit trust fund. This fund sits within the UK All Companies sector alongside their top performing UK Equity Recovery’ fund. However the difference in performance between these 2 funds is significant. The ‘Standard Life Investments UK Equity Growth’ fund has consistently underperformed and over the recent 5 year period it ranked 202nd out of 254 funds with comparatively low returns of 53.87%.

The ‘Standard Life Annuity Purchase’ pension fund has also disappointed. This fund currently hold over £1 billion of investment and during the most recent 5-year period it has been the worst performing fund in its entire sector with growth returns of 25.5%. In comparison, the top performing same sector fund returned growth of 63.79% over the same time period.

Standard Life's New Funds Disappoint

What was also apparent from our review of Standard Life’s funds was the large number of relatively new funds under their management. In total, 254 of the 720 Standard Life funds reviewed have less than 5 years history.

Although each of these funds lack 5-year performance they each have at least 1 years history. We analysed each of these funds for performance alongside all other competing same sector funds over a 1-year period or more and identified that only 17% of them have been able to maintain top quartile sector performance since their inception. In contrast, 71% of the Standard Life funds reviewed that recently launched within the recent 5 year period have performed worse than at least 75% of same sector funds.

Overall Assessment of Standard Life and Their Funds

Our analysis identified a large proportion of funds under the management of Standard Life have struggled for performance in comparison to their peers with the majority ranking in the lowest 25% of performers. Their new funds have also displayed a lack of performance and consistency. From the 254 Standard Life funds analysed that have under 5 years history, only 27 have been able to maintain top quartile sector performance.

While our analysis clearly identifies disappointing performance from the significant majority of Standard Life funds, they do still manage a small proportion of funds that have consistently provided investors with competitive investment opportunities.

It is important to note that the large proportion of investment funds that are available to consumer investors lack consistency and underperform. Indeed there are fund managers who only offer investors poor performing investment options. However, our full Standard Life fund review identifies 20 funds that have proven their quality by maintaining top quartile sector performance consistently over the most recent 5-year period and have delivered better returns for their investors than the vast majority of competing fund managers.

The fact is there are fund managers across the various funds management companies that perform better than the majority of funds within their relevant sectors, and as consumer investors we have the choice to invest in poor performing funds, relying on poor advice or bad choice, or we can choose to arm ourselves with the necessary research and information, and invest in funds and fund managers that consistently achieve top performance within their chosen sector.

Research has shown that by investing only in consistently 'Top' performing funds within an asset allocation model that is suitable to each individual risk tolerance, we can maximise our portfolio growth.